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Difference between revisions of "DIRECT plan vs REGULAR plan"
Cooleo (talk | contribs) (→Transacting in DIRECT plan in a folio that had a REGULAR plan investment) |
Cooleo (talk | contribs) (→What factors are common between REGULAR and DIRECT plan?) |
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*Facilities offered | *Facilities offered | ||
*Other terms and conditions | *Other terms and conditions | ||
| + | ==What is there difference in NAV between DIRECT and REGULAR plans?== | ||
| + | It so appears that the difference in NAV between DIRECT and REGULAR plans increases over a period of time. | ||
| + | |||
| + | This is because, as time progresses, DIRECT plan schemes tend to give slightly better returns because of the positive impact of lower expenses (compared to the REGULAR plan). This will increase the NAV. | ||
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| + | Further, in the REGULAR plan, because of its increased expenses, the gap in NAV (and returns), over a period of time, increases. | ||
==Additional Reading== | ==Additional Reading== | ||
Revision as of 18:07, 13 March 2017
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Contents
Why select DIRECT plan over REGULAR plan?
Why not to use brokers and go directly? Any disadvantages with brokers? I dont think they charge extra for mf? Kindly clarify.
Brokers offer only REGULAR plans which are generally 0.5 to 1.5% expensive compared to DIRECT plans (depending on scheme type).
So when you are investing yourself, you are like be getting this advantage of 0.5% to 1.5% more than what other investors get just because you are bypassing the broker route even when everyone are investing in the same scheme.
The returns will make a substantial difference over time. The longer your SIP runs or you hold the investment, the more the difference will be.
Also for those fans of distributors and brokers out there:
Why take advise from websites and doing your own research and yet end up invest through them? If you are so much interested in giving money for free for distributor, give it a chartiy ;)
Transacting in DIRECT plan in a folio that had a REGULAR plan investment
Sir I have reliance tax saver and axis long term adv through fundsindia. Can I purchase additional to these folio direct? I. E. DIRECT plan from axis and reliance mf site online?
No specific comments on FundsIndia but in general,
Firstly investment websites such as FundsIndia and even stock borkers such as Zerodha do not offer DIRECT option for MF investment
Secondly they might not offer the post-sale support that they might have promised.
It is always better to read, learn and get educated and then invest rather than depending on a tool to make decisions.
If you are already investing in mutual funds through a broker, you can still transact in it from outside the broker by directly placing your request with the mutual fund house or the registrar.
All you need to have in you hand is some basic information:
1. Folio # of scheme / fund you invested in
2. Email and mobile # that was mentioned in the folio
Once you have these, you can create a login at the mutual fund website or with registrars such as MyCAMS and then access your existing investment that was already done through the broker. You can also make new investments in DIRECT plans, or switch the investments made in REGULAR plan to DIRECT plan or other transactions such as redemption.
What factors are common between REGULAR and DIRECT plan?
There will be several things that will be common between a REGULAR and a DIRECT plan.
These include:
- Portfolio of the scheme
- Investment Objective
- Asset Allocation Pattern
- Investment Strategy
- Exit Load
- Risk factors
- Facilities offered
- Other terms and conditions
What is there difference in NAV between DIRECT and REGULAR plans?
It so appears that the difference in NAV between DIRECT and REGULAR plans increases over a period of time.
This is because, as time progresses, DIRECT plan schemes tend to give slightly better returns because of the positive impact of lower expenses (compared to the REGULAR plan). This will increase the NAV.
Further, in the REGULAR plan, because of its increased expenses, the gap in NAV (and returns), over a period of time, increases.
Additional Reading
How much would I save if I take the direct route over regular plans for SIP mutual fund investments? https://www.quora.com/How-much-would-I-save-if-I-take-the-direct-route-over-regular-plans-for-SIP-mutual-fund-investments
Related Topics
- Introduction to Mutual Funds
- Mutual Fund Units
- New Fund Offer (NFO)
- Net Asset Value or NAV
- Know Your Customer / KYC
- Expense Ratio
- Systematic Investment Plan and Compounding effect
- SIP vs Lumpsum Investments
- GROWTH option vs DIVIDEND option